LEHI — All the way back in the mid-'90s, long before the moniker Silicon Slopes was applied to Utah's burgeoning tech community in northern Utah County, semiconductor giant Micron Technology was busy making advanced electronics out of — wait for it — silicon.
While big plans for Micron's $1.3 billion facility, which includes multiple buildings with over 2 million square feet of space a few miles east of I-15 in Lehi, didn't immediately come to fruition, a deal with Intel in the mid-2000s to produce Flash memory for Apple products turbocharged the project.
On Monday, Micron announced it will exercise an option to buy out its IM Flash partner, Intel, in a deal worth $1.5 billion. And while the buyout brings the long-running, and successful, venture to an end, Micron is soaring on its own and getting set to release a new memory/storage product that company leaders believe will help power the technological advances of the future.
"The IM Flash acquisition will enable Micron to accelerate our R&D and optimize our manufacturing plan for 3D XPoint," said Micron Technology President and CEO Sanjay Mehrotra in a statement. "The Utah-based facility provides us with the manufacturing flexibility and highly skilled talent to drive 3D XPoint development and innovation, and to deliver on our emerging technology roadmap."
Micron officials said the 1,700 IM Flash employees aren't likely to be impacted by the change, except that they will "know what company they're in without the complications that come with a joint (operating) venture," according to Scott DeBoer, Micron executive vice president of technology development.
DeBoer also noted that the Lehi Micron plant has borne a direct benefit from the dozens of new tech companies have sprung up in the area in the years since the facility opened.
"This has grown into a very substantial area of talent for Micron over a number of years," DeBoer said. "It's a place that is appealing for Micron team members to live … and it's a place where we can attract talent."
For most of the duration of the IM Flash partnership, that talent was engaged in developing and manufacturing NAND Flash memory products. In 2015, Micron and Intel announced a new product, 3D XPoint, that would perform 1,000 times faster and have up to 1,000 times more endurance than NAND flash. It would also have 10 times the storage density of conventional memory.
Sumit Sadana, Micron executive vice president and chief business officer, said the product is designed to become the memory/data storage solution for the computing processes of tomorrow.
"If you think about where we are headed in the future, applications will be employing more and more functions reliant on artificial intelligence and machine learning," Sadana said. "Cloud computing applications are already focused in these areas … and its just a huge amount of data involved."
Sadana said consumers can already see the results of this reliance on artificial intelligence, like how Netflix calculates other movies you might like based on past viewing choices. He also noted technologies still very much in the development stages, like augmented reality and virtual reality, are already testing the limits of current memory and storage technology.
Sadana explained that Micron's new 3D XPoint technology creates a new tier between DRAM (dynamic random access memory) and Flash memory, both of which function faster than accessing data stored on hard drives. Sadana said 3D XPoint functions faster than Flash, but not as fast as DRAM, but can provide much larger memory storage for processors to access than DRAM — an increasingly important characteristic for data-heavy computing functions like artificial intelligence and machine learning.
Sadana said Micron closed its last fiscal year with revenues of around $30 billion. He also noted exercising the option to buy out Intel as 3D XPoint development and manufacturing helps put in the company on very solid footing, from a business perspective, going forward.
"Micron has never been better positioned as a company, both strategically as well as financially," Sadana said. "In the year ending last August, we hit $30 billion in revenue which made us the second largest semiconductor company in the U.S., behind only Intel."
He also highlighted Micron's unique position among the relatively small handful of companies that develop and manufacture computer memory and storage technology.
"If you look at storage technologies and memory technologies, there are six companies that manufacture Flash, three companies that manufacture DRAM predominantly and two companies that manufacture 3D XPoint," Sadan said. "And Micron is the only one that does all three."
The transaction will close on a date in the next six to 12 months to be selected by Intel. At the time of close, Micron expects to pay approximately $1.5 billion in cash for the transaction. The payment will end Intel's noncontrolling interest in IM Flash and eliminate IM Flash member debt on Micron's balance sheet, which was $1 billion as of Nov. 29.